Question
Mary is the manager of the Alpha company in the grocery industry. The major role of Alpha company is working as a grocery distributor though
Mary is the manager of the Alpha company in the grocery industry. The major role of Alpha company is working as a grocery distributor though the company also produces some products. There are 4 products W, X, Y, and Z caused a lot of troubles for Mary in the past several years since the inventory and sales records were not available. From 2020 with the investment of IT and supply chain infrastructure, Mary can continuously monitor the sales and inventory information of these 4 products. It was the end of 2020. Mary had collected all 2020 weekly sales data and order history for these 4 products shown in the attached spreadsheet. This file also includes the historical order information for every weeks order in 2020. Mary wanted to use scientific ways to forecast demand and manage inventory for these 4 products. She decided to assign a project to Jason who has worked in the company for several years and just got his degree last year. Consider yourself as Jason to figure out what to do from this point forward.
Product W | Product X | Product Y | Product Z |
$220 | $50 | $5 | $3 |
a) Jason decided to use ABC rule to classify these 4 products. A category product(s) will have the target service level of 95%. B product(s) will have the target service level 90% and C products(s) will have the target service level 85%. After setting the appropriate service level, Jason will use the service level information to calculate the safety stock level for each product.a) How should Jason classify the ABC products? (10 points)
b) After classifying these 4 products, Jason wanted to use the ROP model forinventory/ordering management. He believed he would get an accurate demand forecasting for the first week of 2021. But based on the historical data. The attached spreadsheet document includes the order information for 2020. The company places the order of all products on each Wednesday. Jason found the lead time of orders has variations for all these 4 products. Which ROP model should Jason implement?
c) What are the reorder points for each of these 4 products for the first week of 2021?
Sales infromation of each product of 2020 | ||||||
Week 2020 | Product W | Product X | Product Y | Product Z | ||
1 | 34 | 54 | 253 | 203 | ||
2 | 34 | 51 | 253 | 203 | ||
3 | 35 | 55 | 250 | 208 | ||
4 | 34 | 55 | 250 | 201 | ||
5 | 36 | 54 | 248 | 202 | ||
6 | 39 | 57 | 258 | 210 | ||
7 | 36 | 56 | 248 | 202 | ||
8 | 40 | 56 | 251 | 205 | ||
9 | 41 | 53 | 249 | 207 | ||
10 | 44 | 56 | 249 | 205 | ||
11 | 43 | 57 | 242 | 207 | ||
12 | 46 | 55 | 243 | 206 | ||
13 | 48 | 62 | 247 | 202 | ||
14 | 48 | 53 | 240 | 206 | ||
15 | 47 | 56 | 242 | 207 | ||
16 | 51 | 51 | 248 | 207 | ||
17 | 48 | 64 | 241 | 205 | ||
18 | 49 | 57 | 246 | 207 | ||
19 | 52 | 62 | 242 | 206 | ||
20 | 51 | 55 | 238 | 207 | ||
21 | 50 | 58 | 246 | 208 | ||
22 | 57 | 67 | 239 | 205 | ||
23 | 54 | 69 | 241 | 207 | ||
24 | 56 | 58 | 240 | 214 | ||
25 | 57 | 68 | 239 | 206 | ||
26 | 59 | 64 | 232 | 214 | ||
27 | 60 | 65 | 240 | 208 | ||
28 | 63 | 65 | 237 | 209 | ||
29 | 62 | 63 | 237 | 210 | ||
30 | 61 | 64 | 234 | 207 | ||
31 | 59 | 66 | 234 | 212 | ||
32 | 67 | 62 | 232 | 205 | ||
33 | 58 | 71 | 231 | 208 | ||
34 | 66 | 66 | 228 | 211 | ||
35 | 60 | 72 | 232 | 213 | ||
36 | 69 | 68 | 230 | 213 | ||
37 | 71 | 71 | 231 | 207 | ||
38 | 65 | 64 | 229 | 210 | ||
39 | 71 | 69 | 231 | 208 | ||
40 | 68 | 71 | 228 | 207 | ||
41 | 75 | 67 | 227 | 213 | ||
42 | 71 | 73 | 226 | 214 | ||
43 | 78 | 68 | 227 | 208 | ||
44 | 77 | 75 | 217 | 209 | ||
45 | 81 | 75 | 227 | 211 | ||
46 | 79 | 75 | 224 | 212 | ||
47 | 77 | 72 | 225 | 214 | ||
48 | 75 | 71 | 224 | 211 | ||
49 | 79 | 77 | 224 | 213 | ||
50 | 85 | 77 | 225 | 218 | ||
51 | 84 | 79 | 224 | 212 | ||
52 | 78 | 74 | 217 | 215 |
*please read all question parts*
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started